In the latest chapter of a simmering legal battle between content providers and technology companies, the U.S. District Court for the Central District of California preliminarily enjoined Google Inc. from using its Image Search feature to display thumbnail versions of photographs owned by publisher Perfect 10 Inc. Perfect 10 Inc. v. Google Inc., Case No. CV 04-9484 (C.D. Cal. Feb. 17, 2006) (J. Matz ). The court found that Google’s use of these images was primarily commercial and harmed the plaintiff’s market for the downloading of reduced-sized images on cell phones.
Perfect 10 is a Beverly Hills-based publisher of the adult magazine Perfect 10 and the operator of a corresponding subscription website. Google operates internet search engines, including Image Search. Image Search responds to a user search by displaying a number of reduced-size images organized into a grid. The user can scan the small images and choose one by clicking on it, thereby opening a new browser window displaying the underlying web page from which the thumbnail image originated. Google generates revenue by selling sponsored links and advertising in connection with its searches. Perfect 10 sued Google claiming that the Image Search engine directly and contributorily violated its copyrights by creating and publicly displaying its photographs.
The district court rejected several of Perfect 10’s theories, including its claim for infringing distribution of the images and for vicarious and secondary infringement liability. However, the court found that Perfect 10 was likely to succeed on its claim of direct infringement based on Google’s display and distribution of thumbnail photographs corresponding to Perfect 10’s copyrighted images. Specifically, the court found that the display of the thumbnails impaired Perfect 10’s ability to sell its images for download and use on cell phones, a market that was the subject of an existing license between Perfect 10 and a third party. Moreover, the court rejected Google’s fair use argument, principally because Google’s Image Search service increased user traffic and advertising revenue on Google’s website and was therefore highly commercial.
The district court distinguished its decision from the U.S. Court of Appeals for the Ninth Circuit’s ruling in Kelly v. Arriba Soft Corp. in which the Ninth Circuit found that Arriba’s image search results displaying thumbnail versions of Kelly’s photographs were fair use. The key distinguishing factor the court noted was that Google "offers and derives commercial benefit" from its advertising program. Specifically, Perfect 10 introduced evidence that Google displayed thumbnails from infringing third-party websites, which also appeared to be generating revenue for Google through its advertising program. Should the court’s decision ultimately be appealed to the Ninth Circuit, the appellate court will face the key question of whether search engine operators enjoy more limited fair use rights with respect to their search results when their searches are conducted in coordination with purchased advertising.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
